Are you sick and tired of arbitrary assessments of your properties worth? Do you feel the town assessors right to come into your house is an invasion of privacy and unconstitutional? Are you fed up with the town giving you a property tax bill mid-year only to receive a higher bill at the end of the year? This can all stop with a simple solution that will save the tax payers money, make the town officers know the exact amount they have to run the town and give all the property tax payers a figure they can reliably budget on.
I was in the Londonderry Town offices registering my vehicles when I overheard a discussion concerning the second installment of taxes being higher than originally estimated. People often go and fight their property assessments to reduce their property taxes. This reduces the Town’s take since a many are successful in their arguments. The conclusion of the conversation was that the Town has to take in the same amount. This infuriated me for several reasons. The first was that the people that did not argue their assessments now have to pick up the tab for those who did. Second, the Town does not have to take in the same amount if they cut spending as a result of improper assessments! Thirdly, the assessment of a piece of property varies wildly given the housing market making the whole thing a big game; the property values go up, the Town officers lower the rate, the property values go down, they raise the rate. The last straw prompting this article was when I received a notice that the town was entitled to do an inside assessment. How does a new rug or fresh paint have any implication on the services that I extract from the town? For that matter, how does a deck or patio affect the town’s budget? Additionally, I have to work to pay the outrages taxes in this town and therefore cannot take a day off for assessors to come through my house.
Now I am not going to argue the outrageous taxes of this town resulting in lower resale values and higher foreclosures leading to higher taxes and abandoned properties. I do not even think I could sell my house for half of what the town says it is worth and certainly no one would want to buy the house and pay the higher in taxes as they did for their mortgage. I am not going to argue the town’s spending habits for services we do not need. I am simply going to provide a fair and equitable way to calculate property taxes.
Property taxes in New Hampshire are used to pay for town services. These services indirectly or directly benefit people living in the town. The payment of these services should be proportionally to the amount of ownership an individual has in the town. The calculation of property taxes can consistently be set for homes by applying the formula:
PropertyTax = Rate x (0.01 x acreageSqFt + 0.3 x storageSqFt + livingSqFt)
Sorry for the algebra but given the amount of money we spend on our schools, your 3rd grader should be able to figure this out with the following information. The Rate is whatever the town decides the yearly spending needs to be. The acreageSqFt is the square foot acreage of your property. The more acreage you have, the more you have to pay since you are taking up more usable land. The effective rate on the acreage of your property is lower since it requires no town services. The storageSqFt is the square footage of your basement plus your garage plus any enclosed sheds you have. These are charged more of a rate than acreage but less than that of living space. The livingSqFt is the square footage of your house living areas. In my world, whether your basement is finished or not, it is not a living area. In my world, decks and patios are at the rate of acreage since they have no functional advantage over grass.
My real world example is a 3-bedroom garrison with an addition over a two care garage attached by a foyer and a kitchen addition on 48,862 square feet of land with one shed currently paying about $8,000 a year (gasp) in property taxes. The resulting figures populated in the formula are:
$8,000 = Rate x (0.01×48,862 + 0.3×2160 + 3304) = Rate x 4440.62
This results in a Rate of 1.8 for the Town to get the same amount of money from my property as they do now. Alternatively, a person with a 20×30 mobile home on 48,862 sq ft of acreage would pay $1959.5. A 3 bedroom 36’x24’ colonial with a garage basement on 48,862 sq ft of acreage would pay $4456.5. The same 3 bedroom colonial with an attached garage would pay an additional $172.8.
The advantages of this formula over the current assessment method are:
- The town will save money by not having to assess properties every year.
- The town has the information in their files to calculate everyone’s tax.
- The Rate is the same for everyone and there is no debate on how much a property is worth.
Homeowners will know what they will pay every year given that the Rate is published or better yet, voted on.
- The town officers and the people will know exactly what is the available for the year’s budget.
- Home improvements and neighborhood beautification is encourage and not penalized every year with additional taxes.
The crux of the matter is that whether you trim you house with gold or wood, it should only matter to your insurance company and not the town! The state legislature is now filling bills to prevent TSA from giving you a groping yet how different is this from town assessments invading your living space.